A new generation takes on the challenges of farming

October, 2012

People have joined the growing Eat Local movement for myriad reasons, including reducing their carbon footprint, supporting Hawaii businesses and keeping agricultural lands in agriculture.

Grocery stores and restaurants tout their local-food credentials, and more farmers markets keep popping up and attracting loyal customers. A study by the Ulupono Initiative found that 74 percent of Hawaii consumers believe that it’s important that Hawaii grow its own food.

To meet that demand, however, the agriculture workforce needs to get younger. Last year, 3,609 of the state’s 6,192 ag workers were 45 or older, according to the U.S. Census Bureau. That’s 58 percent of the ag workforce; in comparison, only 44 percent of Hawaii’s overall workforce is 45 or older.

The reluctance of younger people is not surprising considering the hard work and uncertainties of farming. Nonetheless, a few young people are stepping up.

“Young farmers are interesting because, if I can paint a broad brush, they’re often not after money. They want to make a living, but they want to do agriculture,” says Steven Chiang, director of the Agribusiness Incubator Program, a business consultancy for the local food industry. “There are very often social motivations behind what they’re trying to do.”

Here are some of those bold young people who have jumped into farming, and the major challenges they face.

Ho Farms

Neil and Shin Ho are both under 30, but they’ve been in the game long enough to know the real challenges of farming.

They never planned on becoming farmers. After growing up on the family farm in Kahuku, the brother and sister both went to college and earned mainland degrees, but they eventually came back to the family business.

Although their parents had been farming for years, the company did not have a recognizable name. So, they started marketing their products as Ho Farms, now a familiar brand for tomatoes and cucumbers to anyone who shops at grocery stores in Hawaii.

In 2006, Ho Farms began selling its products at local Costco warehouses, which Neil and Shin Ho estimate grew the business by 10 times. However, they stopped selling there in 2011 because of Costco’s food safety requirements. Neil says they were audited by a mainland company, using federal guidelines that favor the bigger ag players. Ho Farms grows one acre of eggplant, he says. How can it compare with a farm that grows 50 acres?

The company has no plans to get back into Costco, but is planning to diversify its crops. For instance, it wants to replace mainland imports with locally grown butternut squash and okra. But meeting demand depends on the growing season, Shin says.

“During the summertime, when there’s plentiful sun, we’re able to meet the demand. But when it rains, like a lot in the wet months, it’s really almost impossible to meet the demands. But, at the same time, the challenges are that we still have the same fixed costs, our input costs still remain the same, like lease rent and labor.”

Like many farmers, they had trouble securing a long-term lease on their farmland in Kahuku. So, in April, Ho Farms and D.R. Horton – Schuler Division signed a letter of intent on a long-term farmland lease at the controversial Hoopili development in West Oahu.

“What really showed commitment was a landlord that was willing to give a long-term lease that is affordable so that we could produce food and keep that affordable for local consumers,” Shin says. “Obviously, it costs a lot more to do business in Hawaii. So, I think what Hoopili has done is they defi-nitely made the commitment to us as farmers.”

Ho Farms would not specify the length of the lease, but Shin says it’s more than 15 years and it’s the longest lease she has seen. They will be vacating Kahuku when that lease ends, Shin says, since the landowner wants to go in a different direction.

“Do my parents plan on retiring? No,” Shin says, with a laugh. “I know they don’t know how to go without work.” There is no formal succession plan, “but that is the direction that we are moving in,” she says. “I guess you can say that we are (taking over the family business), but we question ourselves all the time whether it’s something that we really want to do and if we’re going to be able to accomplish what we want to with this business.”

Michael Kamiya was well on his career path. He went to college at Brigham Young University of Hawaii in his hometown of Laie, then worked in sales at a local advertising firm and at Hagadone Printing Co. (which prints Hawaii Business and other publications). About a year ago, though, he rejoined his family business.

His grandfather started Kamiya Papaya more than 40 years ago, and later Michael’s father took over the business. According to its website, the original Kamiya Papaya trees came from a line developed in the 1960s at University of Hawaii’s College of Tropical Agriculture and Human Resources. In the 1990s, when the ring spot virus decimated Hawaii’s papaya crops, the Kamiya Papaya was crossed with the disease-resistant, genetically modified Rainbow papaya. The resulting Laie Gold variety is what Kamiya sells today. It has established itself as a premium product and commands a higher price than other papayas, says Michael, and it can be found at Times Supermarkets, Tamashiro Market and at mom-and-pop stores and restaurants around Oahu.

Michael got into farming to help his father transition into retirement. The farm could have been sold, but since his name is on the product, Michael wanted to keep the business in the family. Although he does the company’s bookkeeping, Michael has mostly left office life behind, and spends a lot of time in the field picking papayas and spraying fertilizer.

He also enjoys being an entrepreneur. “It’s freedom to be working for yourself, and everything you do is for your company,” he says. Michael works directly with restaurant and grocery store buyers, making his new job similar to his previous sales job, but his clientele is completely different. He says he enjoys seeing happy customers when he makes deliveries, and sometimes he’s greeted outside by store owners or produce managers.

His farm behind the BYUH campus will have to move in several years when the college expands, but Kamiya Papaya recently signed a 10-year lease on 15 acres in Punaluu owned by Hawaiian Sun Products Inc.

Isaac Gilette started raising coffee as a hobby but turned it into a business.

He grew up in Kona, in an area called Keopu. His parents’ home was al-ready designated for agriculture, and they had one acre of coffee. In 2005, he registered the business, created a label and started selling coffee at the Kapiolani Community College and Kailua farmers markets organized by the Hawaii Farm Bureau Federation, a nonprofit that supports local ag.

In 2006, Gilette built a coffee mill to process his own coffee cherries as well as his neighbors’, allowing him to expand the business. The next year, he planted five acres of coffee on his property and five more on a neighbor’s land. The crops should be reaching maturity soon.

In 2009, he incorporated his company. The move from a sole proprietorship was a big step in legitimizing the operation as a real coffee business, Gilette says. He hired an accountant, an additional business expense, but that allowed expansion.

His coffee is certified USDA Organic, which gives Keopu Coffee a competitive advantage because there are few organic coffee farms, Gilette says. The certification took two years because he had to switch certifiers when the Hawaii Organic Farmers Association stopped certifying farms.

In addition to farmers markets, he sells his coffee online at keopucof-fee.com. He also supplies a few Oahu restaurants, such as Diamond Head Grill, but says the market in Kona is tough to break into because it is also saturated. He still sells his coffee every other week at KCC and Kailua farmers markets, flying to Oahu on Thursday with luggage full of coffee, and staying with his grandmother in Kailua to save money.

In the long term, Gilette is looking at diversifying. “With the coffee berry borer situation, it’s pretty uncertain times for coffee, to say the least,” he says. “I’ve been giving a lot of thought to other ways that I can put my land into production. … Just some things that I could work into the business, be a little bit more diversified and at least have some sort of a fallback if coffee prices tumble because of the bug.”

Business Consultants For Farmers

Farming takes a lot of skill and knowledge about ecology and science, but the business side is often neglected. That’s where the Agribusiness Incubator Program at the University of Hawaii system comes in.

AIP helps farms across the state become agribusinesses. Funded by grants from the USDA National Institute for Food and Agriculture, the 8-year-old program has helped 244 clients with their businesses. AIP can help any business that is growing or processing Hawaii-grown products, which can include everyone from vegetable and pig farmers to people making salad dressings. There is also a preference for Native Hawaiians.

“As far as I know, we’re the only business consulting group or program that focuses on agriculture,” says Steven Chiang, AIP’s director.

It brings results. Average revenue for its clients has increased by 39 percent, and average profit has increased by 291 percent, according to data provided by AIP.

“We assist with startup, we assist with a lot of financial and marketing type of planning and analysis – basically just trying to get them from point A to point B with anything other than production type of issues,” Chiang says. “But, because of our relationship with CTAHR (the College of Tropical Agriculture and Human Resources), we do act as a sort of a conduit for a lot of our clients to access technical resources within the college.”

Chiang says AIP also helps clients create business plans, because if they seek financing, they need to know how much to ask for. “People say I need money and I want to do this and they never look at how much things are going to cost, not even back of the napkin (calculations),” Chiang says.

“We do a bunch of financial analysis like cost of production. … Basically, we’re trying to figure out what one unit of that thing you’re selling costs you to produce. And nobody gets it right. The vast majority of people have no idea what their number is, so we help with that.”

AIP can also help clients build a website, set up an accounting program and connect them with contractors.

Majority of agriculture workers aged 45 or older

Persuading Graduates

With 1.2 million acres zoned for agriculture, more than 50 percent of the state’s potential farmland, Hawaii Island is focus of the state’s ag future.

Though the University of Hawaii at Hilo has nearly 200 students in its College of Agriculture, many graduates do not go directly into farming, says interim dean Bruce Mathews. Instead, he says, many enter graduate school or take job in the agriculture sciences.

“We’ve tried some things by bringing landowners into class to let the students know about the leases that are available,” Mathews says. “Some landowners are willing to give recent graduates low rates on leases. We’ve looked at microloan financing potentials and other things. A lot of students, unfortunately, they’re really concerned about paying off their student loans. They see farming as really being risky. It’s really challenging to get the college graduates.”

“They have some people with great agricultural experience at W.H. Shipman and those people are willing to consult,” Mathews says. “Not telling the farmers what to grow, but if they have some advice, to give it to them as far as cultural practices and things.”

Richard Ha has also approached UH-Hilo with the suggestion that graduates could use his greenhouses and tap his marketing expertise. “That’s a big challenge for students, too, worrying about marketing a crop. If you have somebody who is willing to do a profit-sharing arrangement, where he’ll handle all the marketing or help you with the marketing, that could be really useful.”

A legislative appropriation will fund three engineering faculty positions at UH-Hilo, including one for bio-fuel research and another for food engineering and food safety. Mathews hopes there are some ancillary benefits from the program, like animal feeds from biofuel by-products and food-safety training and value added product development and consulting. The first position should be filled by September 2013.

“The commonality between all of the islands was that there was concern about what was going to happen to ag in the future because they don’t see a lot of younger people doing agriculture,” says James Hardway, executive director of the Labor Department’s Workforce Development Council.

But the Labor Department can’t be accused of painting an overly rosy portrait of farming. Careerkokua.hawaii.gov, the department’s own guide to local career planning and opportunities, offers this sober outlook at farming as a career: “As the population continues to grow, the demand for food will grow as well. However, new technology is allowing farmers to produce larger crops than in the past. In addition, large farming companies are buying smaller farms. Some farms are sold because the farmer’s children do not want to farm the land. Others are sold because the farm has too much debt. The end result is that there are fewer farms and farmers. Most job openings will result from the need to replace farmers who retire or leave the occupation for other reasons.”